Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Butter and Margarine in Japan

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Executive Summary

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TRENDS

Butter and margarine continued to decline in Japan in 2017, by 4% in retail current value terms, to reach JPY83.9 billion, mainly due to the sharp decline of margarine and spreads. Margarine and spreads continued to post the worst decline in 2017, of 7% in retail current value terms, driven by the increasing popularity of premium bread in Japan. Japan experienced the significant premiumisation of leavened bread from the early review period. Premium bread in Japan is often rich in flavour, and many consumers find it is just as tasty without any butter or margarine added. In fact, many manufacturers have designed premium bread to be sweeter than regular bread so consumers find it tastier. As a result, although the consumption of bread is not sharply declining, many consumers are not finding they have such a great need for margarine, which is mainly used as a spread in Japan.

COMPETITIVE LANDSCAPE

Megmilk Snow Brand remained the strongest player in butter and margarine in Japan in 2017, with a retail value share of 31%, due to its strong presence as the leading player in all categories within butter and margarine. The company dominated cooking fats, holding a 93% share of retail value sales in Japan in 2017. The company’s lead in margarine and spreads was supported by loyal consumers of the leading brand in butter and margarine, Neo Soft. The brand offered six products as of September 2017, including two butter-flavour margarines and two reduced calorie margarines. In 2017, the company promoted the Neo Soft brand with an activity called Neo Pan Recipe. With Neo Pan Recipe, consumers can see recipes using Neo Soft products on the website, and vote for the best recipe to win home bakery products from Panasonic. Each recipe belongs to one of 47 prefectures in Japan. For example, Kobe beef Katsu sandwich from Kobe in Hyogo won the most votes, and 20 consumers who voted for Kobe beef Katsu sandwich won Panasonic home bakery products.

PROSPECTS

Butter and margarine in Japan is expected to continue to record a decline over the forecast period, with a negative value CAGR of 2% at constant 2017 prices, to reach JPY75.2 billion in 2022. Only butter is expected to see sales increase over the forecast period, due to recovery from the sharp decline seen during the shortages. In retail value terms, butter is expected to record a CAGR of 1% at constant 2017 prices, thanks to the unit price increase caused by the low supply of fresh milk in Japan. Major manufacturers in Japan tend to use fresh milk from Hokkaido, which is seeing a continuous decline in production volumes, caused by the decline in the number of farmers in Japan. Manufacturers are thus highly likely to increase the unit price of these products to maintain profits through producing and selling butter in Japan over the forecast period.

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